Britain's oldest brewer, Shepherd Neame, has announced a robust performance for its London pubs, even as beer prices continue to climb and overall brewing sales face challenges. The Kent-based company, which operates 285 pubs primarily across the south east of England, highlighted an "exceptional" trading period for its venues within the capital city.
Strong London Sales Offset Regional Slowdown
Sales within the M25 region surged by 11.2% on a like-for-like basis during the second half of 2025, compared to the same period the previous year. This impressive growth starkly contrasts with a more modest 1.4% increase recorded for pubs located outside London, including those in Kent and Sussex. The disparity underscores a resilient demand in the capital's hospitality scene, which has helped buoy the company's overall performance.
Brewing Business Faces Headwinds
However, this pub success was partially offset by weaker performance in Shepherd Neame's brewing division. The total volume of sales for its own beer brands, which include popular names like Spitfire, Bishops Finger, and Whitstable Bay, declined by 11.6% over the same period. This drop was largely driven by reduced sales to supermarkets and other retail outlets.
The company attributed this decline to a broader market shift away from traditional ales and towards stout and premium lager labels. In response, Shepherd Neame has been focusing efforts on driving sales of its beer brands within its own chain of pubs to counteract the falls experienced elsewhere in the market.
Rising Prices and Tax Pressures
This strategic pivot comes despite the company implementing price increases over recent months. Chief executive Jonathan Neame explained that these adjustments were necessary to offset higher taxes, particularly national insurance costs. He emphasised that the price hikes were targeted and not applied across every product line.
"We're very, very sensitive to the price impact and do not wish to put prices up any more than we have to," Neame told the Press Association. "But yes we do have to adjust the price if we are experiencing above-inflationary impacts on our cost base, which has been the case for hospitality for the past five years."
Nationally, the price of a pint has risen by approximately 30% over the last five years, according to Neame. This inflationary pressure has been a consistent challenge for the hospitality sector, squeezing both consumers and businesses alike.
Employment Challenges in Hospitality
The chief executive also warned that employment within the pubs and hospitality industry is being constrained by higher labour costs, exacerbated by recent tax increases. These financial pressures have made it more difficult for firms to hire new staff, leading Shepherd Neame to be "very tight on taking on new employees."
Neame pointed to other European countries, such as Germany and Ireland, which have implemented VAT-cutting measures to support their hospitality sectors and stimulate youth employment. He expressed hope that the UK Government would adopt similar approaches, positioning the industry as part of the solution rather than part of the problem.
"Our sector was seen as a very good way of stimulating jobs, and I hope that that's where the UK Government moves to," Neame stated, highlighting the potential for policy interventions to alleviate some of the ongoing cost pressures facing brewers and pub operators across the country.
